Overflowing Order Books And Buoyant Wages - I Don't Think So

Are you buying the story being put out by the Reserve Bank of Australia and government of near future strong prosperity, buoyant wages, stronger employment with overflowing order books and a hike in the current interest rate.  No many it seems believe it.  While most can believe in the two tier patchwork economy supported in factories and offices the prevailing view appears that although there is a mining boom there is little sign of growth with also talk of some industries being in recession.

Business and consumer confidence surveys show a decline since the beginning of the year as a succession of natural disasters home and abroad have ensured soft continuing conditions in the economy that even contracted 1.2 per cent during the March quarter.  The deepest downturn in 20 years with some 80,000 jobs disappearing since April, house prices falling and advertised jobs falling.

The federal government seems to be in tune with the RBA that has a budget expecting stronger demand for labour and capital that is likely to cause inflationary pressures. The markets view even following warnings of a rate increase is to place a 11 per cent chance of a rate cut next month with the feeling of an almost zero chance of any increase this year.

For the families they are about to be hit with higher gas bills from July, set to rise by some 10 per cent for 160,000 households in NSW. The important point to remember is if you work from home you may be able to claim part of your gas bill as a legitimate tax deduction. The use of an online tax managercan assist here as it will identify the deductions that are allowed which could also include power and office equipment.  When costs are rising its good to know you may be able to claim some money back from the taxman. You will not receive a thank you card if you overpay him!